Online Publishing Is Getting More Political. It Might Be Getting More Profitable Too.
The key to making money from online news might be understanding the mistakes of newspapers past.
The first newspaper published in America went out of business in four days.
It was a multi-page broadsheet called “Public Occurrences Both Forreign and Domestick” published on September 25, 1690, in Boston. The goal was for it to publish monthly, but the British-installed governor of Massachusetts didn’t appreciate its anti-English sentiments and put a stop to the press immediately.
“Great inconvenience may arise by the liberty of printing,” British authorities warned the governors of Massachusetts, and so began the difficulties of working in publishing.
It is not easy to imagine a technology that will receive as much publicity as the blockchain did last year but there's…www.datadriveninvestor.com
Today in the world of media, it seems at times that any publisher could be four days away from the end of its run.
Craigslist killed newspapers, we’ve been told. The internet killed publishing, we’ve been told. Legacy papers that started as print but migrated to digital struggled, but so too have digital originals, built for the brave new world of view-and-click based revenues.
So what works for publishing? In a period of upheaval, it can be useful to keep an eye on the past as well as the present for guidance. Luckily, both are rich resources right now.
Then & Now: Publishing Gets Political
Initially newspapers in the nascent United States were a means for immigrants to feel connected to the old country. New Americans looked back across the ocean, homesick for updates from the places they’d left behind.
With the Revolution, that began to shift. The public sought news from the colonies as the push for independence from Britain pulled the focus inward.
As printing proliferated and gained wider audiences, papers became lucrative through revenue from ads and circulation. The country went from 35 papers in 1783 to more than 1,200 in 1833.
Aided by the public’s growing political participation, higher literacy rates, newfound leisure time, and advances in printing technology, circulation numbers soared. One estimate shows the annual circulation of all newspapers doubled between 1828 and 1840, expanding from 68 million to 148 million.
High circulation afforded publishers considerable influence and many papers took on political patrons, adopting editorial stances that aligned with the parties of their backers. This period—from 1780 to 1830—is known as the “Party Press” era, and was defined by increasingly political and polemical publishing—but also record-high political engagement by the public.
Writing in The Atlantic, Derek Thompson notes the similarities to the party-affiliated publishers of the U.S.’s early days and what’s happening with news today, but he also points out how the move away from politically charged content was a function of changing revenue sources:
“It was advertising that led to the demise of the party press. Ads allowed newspapers to become independent of patronage and to build the modern standards of ‘objective’ journalism. Advertising also led to a neutered, detached style of reporting — the ‘view from nowhere’ — to avoid offending the biggest advertisers, such as department stores. Large ad-supported newspapers grew to become profitable behemoths, but they arguably emphasized milquetoast coverage over more colorful reader engagement.”
The Pivot Away From Ads
Now, Thompson says the business models of publishing are shifting away from advertisers and back to patrons and subscribers. Aligning with the interests of readers (and even more so, wealthy backers) appears to be making publishing more political again, but it also may help the industry regain its financial footing.
Taking a stand—and potentially alienating some readers while energizing others—appears to be emerging as an opportunity for publishers to differentiate, thereby carving out a stronger market share.
Thompson offers the New York Times’ revenue shift as a prime example. In a matter of decades, The Times went from earning 60 percent of its revenue from advertising to now more than 60 percent from reader payments.
“As its business model has changed, so has its coverage. ‘Look at The New York Times in 1960 vs. 2010; the reportage is more interpretive,’ observed the late James L. Baughman, the communications theorist and University of Wisconsin professor.”
How to Succeed in Business by Really Trying
Jeremy Littau, a former journalist and current associate professor of journalism and communication at Lehigh University, says papers missed out on evolving during the boom years of the first half of the 20th century when they failed to listen to their audiences.
“Most newspaper chains were publicly traded companies that had conditioned investors to expect high profit margins, often in excess of 30 percent,” Littau writes. “BUT, they rested on their laurels with these high returns, neglecting the opportunity to invest in R&D that could have better prepared them for the coming shift created by the internet.”
With the rise of the internet, necessary information such as weather forecasts and classified ads were no longer exclusive to papers. As such, Littau says there came a “reckoning around how valuable the news in its current form was.”
Years of complaints by women and people of color that media mis and under-represented them had long been ignored by papers. Now, failing to listen or differentiate their offerings meant they failed the relevance test. For many news publishers, their product wasn’t unique, uniquely good, or worth paying for in the eyes of readers, and that discovery has compelled them—legacy brands and online originals alike—to change.
Spice Up Your Offerings
One potential recovery story to watch is Buzzfeed. After overestimating its revenue capabilities in 2018, thus falling short of investor expectations and prompting the company to cut 15 percent of its workforce in early 2019, Buzzfeed appears to be adjusting.
The company is diversifying in unusual ways, including partnering with spice brand McCormick to develop a new line of spice blends for fans of Buzzfeed’s Tasty cooking videos.
In a way, Buzzfeed is taking a page out of the Facebook/Google playbook by recognizing they own an audience and a platform that’s valuable to others. McCormick gets to partner on a new product, sell to a target audience and gain direct access to customer data, while Buzzfeed earns revenue from a branded product and ad distribution.
It’s an approach that pays attention to what the audience likes about existing content and leverages that information to give them novel ways to enjoy it.
Buzzfeed’s comeback is far from confirmed (especially given rifts between management and content teams related to unionizing), but its strategic shifts offer a useful lesson to publishers: Looking at what your audience likes, what they want, and thinking outside the box about how to reach them (maybe different content types? Products? Platforms?) better serves your readers and your bottom line.